The title of this post was an opinion from a respondent of the latest Bank of American Housing Survey. With the low amount of buyer traffic right now, there is certainly some truth in what the respondent says. With all the short sales, pre-foreclosures and bank owned-properties out there, what’s a buyer to do? Listings, unless they are something with decent demand, just don’t get much attention unless they’re priced where buyers see value.
“Foreclosures and short sales are now impacting the market in a greater scaleâ€, was another respondents contribution. Expect the impact of them to grow substantially in 2008 (my opinion). There are many more on the way.
“Many buyers are required to put more downâ€, was yet another quote. Many? More like most. Which is what I mentioned to a prospective seller client this morning. Gone are the days of 100% financing, for most buyers anyway. So his $300k property buyer will most likely need 5%-10% as a down payment. You think the lender is going to take all the risk in a market still heading south? So that’s $15k to $30k that many buyers would need to consummate a purchase. That takes many prospective buyers out of the market.
“Some lenders have specifically identified certain areas as unstable…â€, was also offered by a respondent. If you’re selling, better hope your neighborhood is not “unstableâ€. Who wants to lend money to someone looking to purchase in an unstable area?
Check back in early February and we’ll see if local Realtor sentiment (including my own) has changed.
Contact me if you’d like the full B of A Housing Survey for December of 2007
Lenny – what an excellent post on what’s really happening in this market. Thanks for your thoughts.
Thanks Cyndee. I always to look forward to getting the B of A survey results. Agents are on the front line so to speak, and always have a good take on the pulse of the market.
Lenny, great post. I work with almost all bank owned properties. In fact, I am starting to see a great deal of activity on these properties in the Orlando Real Estate market.
In fact, I placed an offer for my client on a property last week and received a response from the bank that there were three full priced offers on the property.
It goes to show that a well priced property will see a lot of activity here in Florida. The market is not bad at all – it is just that many people are too high on their prices. Either people will need to hold on to their properties or drop them to a realistic price that has a chance of selling.
Great post. Sorry if I’m a rambler